The Punjab & Maharashtra Cooperative Bank (PMC Bank) continues to remain on top of the news following the RBI clamping down on it in the last week of September. The regulator put a cap of Rs 1,000 for withdrawals, then increased it to Rs 25,000 and now, after a huge outcry, the withdrawal limit has been hiked by RBI to Rs 40,000.
Meanwhile the top management team from the beleaguered cooperative bank has made a visit to the Reserve Bank of India and met with the Governor Shakthikanta Das, according to a Financial Express report. The RBI-appointed administrator of the bank and the members of PMC’s advisory council have assured the RBI that the bank’s balance sheet will be redrawn to reflect the real position of its finances, following disclosures of massive frauds committed by those at the top, most of whom have now been arrested.
The main issue is the cooperative bank extended loans to the extent of over 70% of its lending to one borrower, HDIL, a Mumbai-based real estate firm. The HDIL’s promoters Wadhawans are also in police custody and under investigation.
The depositors in PMC have been a rattled lot and have been airing their grievances publicly. With assembly elections in Maharashtra just days away, the issue has been kept on top of the news headlines. Two or three of the depositors losing their lives in quick succession has not helped either. Hopefully, the latest order to enhance to withdrawal limit to Rs 40,000 will ease the tension.
Those managing the day to day affairs at PMC will now have to get down to finding out how much of the securities pledged with the bank against loans availed can be monetized. Already a forensic audit has been instituted and based on the findings the next steps may be initiated.